{"id":29935,"date":"2015-09-25T05:09:32","date_gmt":"2015-09-25T03:09:32","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=29935"},"modified":"2015-09-25T05:09:52","modified_gmt":"2015-09-25T03:09:52","slug":"29935","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/29935\/","title":{"rendered":"What’s on Yellen’s Mind?"},"content":{"rendered":"

Federal Reserve Chair\u00a0Janet Yellen said the U.S. central bank is on track to raise interest rates this year, even as she acknowledged that economic \u201csurprises\u201d could lead them to change that plan.<\/p>\n

\u201cMost FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter,\u201d Yellen said during a speech Thursday in Amherst, Massachusetts. \u201cBut if the economy surprises us, our judgments about appropriate monetary policy will change.\u201d<\/p>\n

\u00a0While \u201cthere wasn\u2019t anything significant enough that changed in one week for her to give us a different take,\u201d said\u00a0Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York, Yellen \u201cfinally acknowledges that she, specifically, does believe that a rate hike is appropriate this year.\u201d<\/div>\n

Porcelli expects a December increase, but thinks there\u2019s a high hurdle to moving this year.<\/p>\n

Slower demand from China, where growth is projected to drop below 7 percent this year, has helped push down\u00a0commodity prices, sapping already low inflation in the U.S. The Fed\u2019s preferred gauge of price pressures rose\u00a00.3 percent in the year through July and has been under its 2 percent target since April 2008.<\/p>\n

\u201cWe cannot be certain about the pace at which the headwinds still restraining the domestic economy will continue to fade,\u201d Yellen said in her remarks Thursday. \u201cRecent global economic and financial developments highlight the risk that a slowdown in foreign growth might restrain U.S. economic activity somewhat further.\u201d<\/p>\n

The Fed has been forced to weigh headwinds against signs of continued growth in the domestic economy. U.S. employers have added 1.7 million jobs to payrolls this year, pushing\u00a0unemployment down to 5.1 percent in August, its lowest in more than seven years.<\/p>\n

\u201cOn balance the economy is no longer far away from full employment,\u201d Yellen said in her speech. \u201cIn contrast, inflation has continued to run below the Committee\u2019s objective over the past several years, and over the past 12 months it has been essentially zero.\u201d<\/p>\n

Yellen highlighted that inflation expectations have remained well-anchored, but said that the central bank shouldn\u2019t take it for granted that they will stay that way. She said she thinks \u201ctemporary effects\u201d of falling energy and non-energy import prices are the driver behind the tepid inflation, and expects price pressures to rebound barring further decline in crude oil prices and further appreciation in the dollar.<\/p>\n

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Federal Reserve Chair\u00a0Janet Yellen said the U.S. central bank is on track to raise interest rates this year, even as she acknowledged that economic \u201csurprises\u201d could lead them to change that plan. \u201cMost FOMC participants, including myself, currently anticipate that … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[70,18],"tags":[],"class_list":["post-29935","post","type-post","status-publish","format-standard","hentry","category-big-banks","category-news-blog"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t